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German solar power is a sunrise market

German solar power is expanding to meet the energy economy’s needs

Germany has belied its status as a country with the fewest hours of sunshine in the world to become one of the planet’s largest solar power producers. In 2017, Germany ranked fourth globally and accounted for about 10 per cent of the global installed capacity, according to the International Energy Agency.

In 2017, Germany ranked fourth globally and accounted for about 10 per cent of the global installed capacity, according to the International Energy Agency.

This has been achieved by 1.7 million small-scale solar panel operators rather than by big, centralised power producers. These operators produced 9.6 per cent of Germany’s net energy production in the first nine months of 2018, according to research institute Fraunhofer ISE. Further, solar power has become the cheapest mode of power generation in Germany, according to Fraunhofer ISE, which says that equipment and installation costs fell by 75 per cent between 2006 and 2017.

By 2020, the EU hopes that 20 per cent of energy will come from renewable sources such as wind, solar and biomass. But clean energy sources don’t mean compromising on Germany’s historical culture. The Hofbräuhaus, the famous 400-year-old brewery in Munich, has embraced the challenge by moving to a clean energy provider – a solution many older constructions have to make to become green.

Not all buildings have such heritage, but family-owned construction firm, Goldbeck, based in Bielefeld, North Rhine-Westphalia, has turned construction on its head with standardised elements rather than a standardised design. Shell and support structures are standardised, but energy efficiency is integrated into design to produce tailor-made solutions. Factors such as the geographical location, orientation, facade and proportion of window surfaces are examined to ensure optimal heating, cooling and ventilation. Additionally, Hochtief, which has American Depositary receipts traded in the US, also offers a readily investable example of green construction. It was responsible for building the State Bureau of Investigation in Dusseldorf, where a geothermal power plant contributes to natural internal air conditioning. A rooftop photovoltaic installation cuts energy consumption and reduces CO2 emissions by about 65 metric tons per year.

This is a grassroots revolution that starts with popular German acceptance of solar power and the aspiration for energy independence – an aspiration that may soon become as natural a reflex as the goal of home ownership.

Companies like Sonnen, Senec, Solarwatt and many others offer integrated solutions that allow for storing surplus solar energy at home. This is a grassroots revolution that starts with popular German acceptance of solar power and the aspiration for energy independence – an aspiration that may soon become as natural a reflex as the goal of home ownership. The combination of a photovoltaic system used on the roof and an energy storage system in the basement allows about 75 per cent of a house’s yearly electricity requirement to be met with self-produced energy. The storage systems, which mostly use lithium battery technology, serve as an intelligent energy management system that automatically adjusts energy usage in the household. Many of these storage systems offer a “swarm” function, so they can be combined to form a massive “Virtual Power Plant”, supporting the electricity grid.

Prices for home storage technology have fallen sharply in recent year, but “Battery-Swarm” users don’t simply become independent, in energy terms. They can also make money from the surplus solar power that they collect on their roofs during summer, as well as from the unused storage capacity that they usually have during winter, when there is less sunshine, but the grid is full of wind energy. Most systems also include applications such as weather forecasting and estimated forward charging patterns, in order to maximise the system’s return. Electric vehicle chargers or heat pumps can also be integrated to maximize solar energy use.

Such integrated solutions are taking off internationally. In May, for example, Sonnen raised €60 million to increase its presence in the US and Australia, with Shell Ventures coming on board alongside existing investor GE Ventures. Sonnen said it will expand its power-sharing community and grid-related services, and that it is aiming to be profitable within two years.

In a world in which genuine growth investment stories are rare, solar power in Germany provides genuine prospects for profitable expansion. Around 10 times more solar power could be installed compared with current levels. Ingrid Weiss, unit head for smart cities and networks at WIP Renewable Energies, argues that solar photovoltaics has “really huge potential” to meet a large part of future German energy needs across sectors. Germany is leading the breakaway to energy independence for individuals and businesses. Total solar battery installations in Germany exceeded 100,000 units this summer (2018) and, at the current rate of growth, may double by 2020, according to the BSW solar lobby. Old style energy companies will struggle to keep pace.

Germany is leading the breakaway to energy independence for individuals and businesses.

With strong expansion plans also in place for electric vehicles and “Power-to-Heat” applications, Germany is about to pair all its energy sectors with renewable electricity – and to decouple from fossils in the process. The growing capacity of Germans to generate and store their own power means that the aspiration of energy independence is already turning into a reality.

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